Lest history be forgotten, it may come around again to bite us when we least expect it.
During the war between the Confederate States and the United States of America, The Legal Tender Act required debtors to accept “greenbacks,” the U.S. Government’s paper currency. The National Bank Act barred state banks from issuing notes, giving the U.S. Government a monopoly on paper currency. Finally, The Internal Revenue Act imposed a federal income tax and other levies. Henry Brands asks, however, whether “greenbacks” fall under the U.S. Constitution’s wording that the federal government can “coin” money. If money was in coin specie when the constitution was written, the meaning could be widened to include new means without necessarily extending the power of that government beyond what was intended.
The full essay is at "Unconstitutional Governance in the Civil War."
Source: Henry W. Brands, American Colossus: The Triumph of Capitalism 1865-1900 (New York: Doubleday, 2010), p. 13.
